The current issue and full text archive of this journal is available at www.emeraldinsight.com/1746-8809.htm IJOEM 6,4 Empowering rural consumers in emerging markets C. Samuel Craig and Susan P. Douglas Stern School of Business, New York University, New York, New York, USA Abstract Purpose – Rural consumers in emerging market countries are among the largest and fastest growing segments of the world’s population. The purpose of this paper is to examine marketing’s role in tapping potential in rural areas and suggest how firms can help potential consumers develop their purchasing power, thus creating a situation that benefits both consumers and the firm. Design/methodology/approach – The study is based on information on company web sites (of both multinationals and emerging market firms) and other published information regarding these firms’ activities in emerging markets. This was supplemented by personal interviews conducted with marketing executives in India. Findings – It is found that marketing strategy must be developed de novo as strategies adopted in developed markets are not adapted to rural market conditions. This must be based on a thorough understanding of consumers, particularly their multiple roles as producers and consumers. In addition, firms need to focus on finding ways to empower consumers and enhance their ability to consume, by integrating them into the value delivery system. Finally, distribution is the key element in the marketing mix and firms must spend considerably more time focusing on infrastructure development and expanding distribution to ensure product availability. Practical implications – The paper identifies key strategic imperatives that need to be considered by firms from developed countries in designing successful strategies to reach and tap the vast potential of rural consumers in emerging markets. Originality/value – The paper focuses on the role marketing can play in improving consumer income levels in rural areas of emerging market economies by integrating them into the value chain and enhancing their ability to consume. Keywords Emerging markets, Market economy, Rural consumers, Marketing strategy, Value chain, Developing countries Paper type Viewpoint 382 Received November 2010 Revised November 2010 Accepted February 2011 International Journal of Emerging Markets Vol. 6 No. 4, 2011 pp. 382-393 q Emerald Group Publishing Limited 1746-8809 DOI 10.1108/17468801111170374 Introduction As growth plateaus in the developed markets of North America, Western Europe and Japan, firms are focusing increased attention on opportunities outside these markets. The large size and high rates of growth in emerging market countries such as Brazil, Russia, India and China have sparked growing interest among CEOs and managers of companies from industrialized Western countries. To date, however, much of the focus has been on targeting affluent consumers in urban areas in these countries (Wilson and Purushothaman, 2003). Often products and branding strategies used in industrialized Western countries are leveraged to tap these market segments with minor adaptations in the execution of product and brand positioning, pricing, promotional and distribution strategies. However, the major growth potential lies not in higher income consumers living in urban areas, but in the large numbers of lower income consumers in rural areas (Prahalad, 2006; Mahajan and Banga, 2006). In India, a predominantly agricultural nation, 71.5 percent of the population live in rural areas and in China, 60.5 percent while at Empowering rural consumers 383 . together with the fragmentation in demand. In addition. Prahalad and Hammond. more creative approaches to tap the latent potential in these markets. focusing particularly on the social and economic context of consumption and the underlying drivers of consumption and purchasing behavior. as well as the difficulties in realizing consumer potential in emerging markets. Nature of consumer potential in emerging markets The vast populations of India and China provide attractive growth opportunities for multinational companies (Prahalad. such as McDonalds. as well as the challenges in developing marketing strategy. this requires fostering entrepreneurial skills to establish networks to promote and distribute products to consumers in outlying areas. 2006. This together with their geographic dispersion and the lack of an effective distribution infrastructure requires a radical rethinking of traditional marketing strategies and the development of new. has been focused on urban markets in these countries. The low levels and variability of income. KFC and Starbucks. is the adoption of a long-term perspective which focuses on developing the economic base of consumption and distribution.of the population live in rural areas (Human Development Report. as well as enhancing consumers’ ability to afford them. This approach. but also to adopt a broader perspective in considering consumer needs and consumptions patterns. 2006. taps only a small fraction of the growth potential in emerging markets. 2004). result in markedly different consumer needs and ability to purchase products compared to urban consumers. Most importantly. building demand for the products and services offered by marketers. 2002). 2002). 2005). Most notably. High-end luxury companies. positioning. Most important. media strategies or alternatively adding local product variants (Dawar and Chattopadhyay. it ignores the mass of consumers in rural areas who have substantially lower and more variable income levels (Prahalad. In turn. have primarily targeted urban consumers (Chandler. thus creating a situation that benefits both consumers and the firm. Doctoroff. which rests on leveraging know-how. particularly among US and European consumer goods companies. The purpose of this paper is to explore marketing’s role in tapping potential in rural areas of emerging markets and to suggest how firms can help potential consumers develop their purchasing power. the lack of an effective marketing and distribution infrastructure means that creative low-cost distribution strategies must be designed to reach these consumers efficiently. products and marketing expertise developed in affluent Westernized nations. Gucci. Marketing’s role in improving the overall standard of living in emerging markets is highlighted. as well as US fast-food companies. 2006). resulting in needs and concerns which are markedly different from those of affluent consumers in urban areas. most attention. Success in reaching low-income consumers in rural areas requires a radically different marketing approach centered on modifying the marketing mix to offer low-cost functional and in some case substantially different products. often making only minor modifications to products. However. however. Strategy needs to emphasize not only building a strong organization to reach large dispersed markets in these areas. such as Prada. The key characteristics of consumption patterns in rural areas are identified. it is critical to develop mechanisms to empower consumers and find ways to enhance their purchasing power. Cadillac and Mercedes. as well as the design of innovative promotional and pricing strategies focused on providing value to consumers. In addition. Attitudes toward the role and status of women differ. i. rice is a staple and dietary preferences are often vegetarian. much of this potential is latent and must be carefully nurtured and developed if it is to be realized. levels of female literacy may vary with the status of women implying greater need for use of visual symbols and greater vulnerability to knockoffs which imitate symbols and logos used by national brands and are sold by unscrupulous traders. for example. increasing awareness of high rates of growth and consumer affluence in urban areas. Linguistic. wheat is a staple crop and a key component of the diet. In both India and China.IJOEM 6. their large numbers offer sizeable market potential. for example. there are substantial regional differences in cultural values and social mores limiting the use of similar approaches and appeals. transportation. 2007). In Southern India. Consequently. ranging from the spicier dishes popular in Szechwan to the sweet and sour tastes of Cantonese cuisine (Roberts and Rocks. distribution and other marketing activities. as well as ability to purchase non-food items. Typically these require the adaption of promotional copy and in some cases. cultural and social heterogeneity in emerging markets also imply that use of a uniform marketing strategy for rural areas is rarely feasible. in China there are substantial differences in food consumption patterns and diet. product labeling as well as the increased complexity of managing personal selling. or rice as well as vegetables. generates aspirations among rural consumers to purchase the branded goods which offer promise of better quality and are symbols of participation in a more affluent consumer lifestyle. 2002). Strategic imperatives in marketing to rural consumers If multinational firms are to sustain past growth rates they need to tap into the enormous potential that exists in emerging market economies. 2005). particularly staples such as grain.e. While consumers in rural areas typically have low per capita incomes. energy and water. impacting use of appeals to women or creating barriers to the employment of women as distribution agents or in personal selling roles (Rangan and Rajan. the low figures for per capita income underestimate actual standard of living. Equally. Many are small farmers who grow much of their own food. Linguistic fragmentation also adds to packaging and promotional costs as an adaptation to local regional languages is needed. Previous successes and failures of multinational firms in emerging markets suggest that the most serious mistake such firms make is attempting to leverage strategies and experience successful in developed markets to emerging country markets (Dawar and Chattopadhyay. In many emerging markets. Equally. combined with the inadequacy of the marketing and distribution infrastructure and the hard infrastructure. There are considerable challenges facing US and European companies who lack experience in these markets. mean the experience and skills developed in industrialized countries are of limited value . However. Often there is substantial bartering and a sizeable informal economy which does not appear in official statistics. In Northern India. as well as growing availability of branded goods at a range of different price points. there are marked regional differences in agricultural production and related differences in food tastes and preferences. The unique characteristics of consumer demand in emerging markets.4 384 the same time integrating potential consumers into these production and distribution networks to increase their purchasing power. Heterogeneity of demand within these markets further compounds market fragmentation. in emerging markets. In essence this enables the firm to develop a broader and more complete view of consumers as part of a vibrant consumption ecosystem. This experience not only generates better understanding of local market conditions. (2006) focus on the role of information technology in shifting power from suppliers to buyers. 2004). developing this understanding also involves examining their role as producers as well as consumers. Since many consumers in emerging markets derive their livelihood from agriculture. Efforts aimed at empowering consumers and enhancing their ability to consume can take many forms. Higher income levels may simply be a by-product of economic Understand consumers Empowering rural consumers 385 Marketers Develop ability to market Consumers Enhance ability to consume Figure 1. 2002). Pires et al. in emerging markets. this also involves understanding not only the important values and beliefs that affect purchase and use of products. Development of marketing strategy in emerging markets . but can also reveal information that is helpful in formulating products and appeals.600 (www. the term empowerment has been used to refer to increased consumer control and involvement in the creation of the goods they consume (Wathieu et al. The in-depth understanding of consumers not only guides development of marketing strategy.cia. Rather firms need to start afresh gathering basic knowledge about the fundamental underpinnings of consumption and the ways in which local resources and capabilities such as. In designing strategies for emerging markets. In these countries-consumers may desire to purchase products. but it is of paramount importance in emerging market economies. namely that of understanding consumers (Figure 1). but also enables the firm to develop strategies to empower consumers. Binswanger (2006) uses the term to denote involvement of those living in rural areas in designing.900 and in China $6. However. there are three fundamental challenges faced by the multinational firm. labor. planning and implementing their own rural development programs. Once an adequate understanding of consumers has been developed. but lack the means to do so. This is knowledge that goes beyond what can be gained through traditional marketing research. communication and social networks can be developed and utilized to meet local consumer needs (London and Hart. Here the use of the term “empower” relates to its meaning as “enabling” consumers to purchase the goods and services they desire. In India the estimated average per capita income (PPP) for 2009 was $2. The majority of consumers live at or below the poverty level. This is typically not a priority in markets in highly developed countries. attention needs to shift to activities aimed at finding ways to enhance consumers’ ability to consume. but also the basic living conditions and social context in which consumers live and the infrastructure which underlies and supports consumption and purchasing decisions.gov). Broadly.. The first challenge is one that all marketers face regardless of the context. It requires active involvement and participation in rural communities to gain an in-depth and nuanced understanding of consumers. Understanding rural consumers The first challenge firms face is understanding not only consumers and their needs. Problems arise relating both to the hard infrastructure. but also the context in which they live and consume. it is not entirely uncharted. communication and information networks. 2006). The three strategic imperatives identified earlier are discussed next in more detail. energy. Not only is it difficult to gain distribution.4 386 development and the growth of the marketing and distribution infrastructure. This requires developing a new base of knowledge about consumers in these areas. In many cases. This need is typically an important priority for multinational firms and often absorbs much of their time and efforts. particularly in rural areas. In emerging market economies. unless the first two challenges have been met and effectively dealt with. Their experience can provide lessons and insights into the best ways to approach consumers in emerging markets. eliminating middlemen. a few pioneering indigenous and multinational firms have devised strategies to prosper in emerging markets. transportation. In order to realize this potential. characterized by numerous very small independent establishments. Once sufficient understanding of consumers has been developed and mechanisms to improve their purchasing power established. as well as some of the pitfalls to be avoided. More proactive efforts involve integrating potential consumers into the value creation/delivery chain. the firm needs to focus on ways to enhance its ability to market. as well as promoting sales of their products (Prahalad. While this is new territory for many firms. improving its efficiency and lowering prices to consumers while at the same time increasing their incomes. such as advertising agencies. The inadequacy of the infrastructure needed to market efficiently to low-income consumers means that considerable effort needs to be directed toward developing and implementing its marketing and distribution strategy. efforts to improve distribution and communication networks will not have the desired impact. employing consumers as distributors and promoters. as well as relying on local resources and capabilities to develop innovative new marketing strategies.IJOEM 6. the distribution system is typically highly fragmented. Low levels of income mean that rural . 2007). Despite the difficulties. Often developing effective distribution channels is a major obstacle. However.e. firms need to develop strategies that respond to its unique challenges. i. as well as the soft infrastructure of organizations. Marketers can also work closely with non-governmental organization (NGOs) to help educate consumers about the use of health and hygiene-related products thus helping to improve the standard of living among rural poor. Marketers may also develop initiatives directly related to the marketing of products in rural areas. but also to promote products due to consumer reliance on store owner recommendations as well as the limited availability and reach of mass media. Elements of marketing strategy in emerging markets The vast potential of low-income rural consumers in emerging market countries provides attractive growth opportunities for multinational firms. this stimulates entrepreneurial activities which are supported through micro-financing and benefit both the firm and individual entrepreneurs (Rangan and Rajan. marketing research organizations and distribution intermediaries. such as shampoos and soap can be positioned to appeal to higher order motives. it is critical to understand consumers’ needs and preferences. mass media such as TV or print have limited reach. Providing value for money. In India and in China. but rather that the product or service is deemed to offer appropriate benefits for the expenditure. At the same time. it is particularly critical to consider not only basic needs and preferences. For example. such as running water and electricity. such as Icy Mountain Spring and Morning Lotus Fragrance. In this context. Consequently. low-income levels severely limit what consumers are able to afford.consumers are apt to be most concerned about receiving value for money. often limit the range of products consumers need and are able to consume. Consequently. to increase the efficiency of the value chain by linking farmers directly with agricultural markets and providing information to improve their productivity. This does not always mean a low price. This reflects on the one hand the emphasis on functionality and price and hence limited attention to image. this has required developing product variants that can be sold at lower price points. self-esteem and self-actualization. initiatives such as those by ITC. 2002. In emerging markets. the latter may be less obvious or appear to have a lower priority. Developing consumer knowledge. appealing to personal self-esteem and desire to identify with glamorous personalities. which in developed countries would be achieved by promoting higher end products and brands. in urban areas in China. its premium brand of soap as the soap of film stars. as consumers take whatever brand is available in a product category. Since ultimately consumers’ desires and ability to consume goods and services constitute the engine that drives purchase decisions. the number of brands stocked by a local distributor in a given product category is often limited. P&G sells Crest in exotic flavors. In India. In emerging markets. However. Brand loyalty is also typically low. Often substantial demand potential exists particularly in rural areas at levels below those of international price points (Dawar and Chattopadhyay. Empowering rural consumers 387 . a large Indian conglomerate that began as a tobacco company. brand switching is common. is critical in developing a broader market base for such products. such as belonging. In emerging markets. understanding how inexpensive products. Further. Low-income levels also imply high levels of price sensitivity. but can be powerful motivators notably in promoting use of personal products such as shampoo or soap. Since retail outlets are small and consumers often have to ask shopkeepers for products which are kept behind the counter. also increase the incomes and purchasing power of the farmer/consumer. a broader understanding of the multiple roles as consumer. the advice of the shopkeeper is frequently critical in influencing brand choice. Equally and particularly in rural areas. such as food. Mahajan and Banga. producer and distributor occupied by much of the population in emerging markets and how these roles are interlinked underscores how actions which impact and reinforce income-earning roles as producer or distributor will enhance consumption capacity. 2006). This stimulates agricultural productivity and helps to expand the size of the market for many consumer durables and non-durables. At the same time. modest living conditions and the absence of resources. Hindustan Unilever has traditionally promoted Lux. In some cases. but also those which are less evident. for example. shelter and clothing which are apparent and clearly articulated among poor consumers. many are engaged in subsistence farming. while many basic consumer needs are similar throughout the world. 2007).hul. Hindustan Unilever had only managed to secure distribution in approximately 16 percent of rural markets. Empowering consumers. functional. either through direct efforts aimed at expanding their role in the value chain or to improve the efficiency of the supply chain by reducing information asymmetries that consumer/producers face in emerging markets.co. use of cheaper components. rather than more elaborate trendy versions in the latest style or fashion. elaborate marketing programs will fail. Uncertainty with regard to future income and lack of a regular income flow further reinforces this propensity. Enhancing rural consumers’ ability to consume In order to be successful in emerging market economies. In addition the product offering has to be aligned with consumers’ shopping and usage behaviors. Firms need to find ways to enhance the incomes of prospective purchasers. variability in income flow may result in competition across a broader range of products rather than between different brands within a category. but also to find ways to increase the ability of rural inhabitants to afford the products. Despite its long time presence in India. Equally.000 (www. The development of the specific flavor was based on the belief among Chinese in rural areas that salt helps whiten teeth (Roberts. had not resulted in substantial sales increases. consumers in emerging markets typically desire basic. Consumer packaged goods companies seeking to expand sales in low-income rural areas are faced with a dual challenge. This requires products that are affordable. helps expand the market. long-lasting products. Since many consumers are paid on a daily rather than weekly basis and spend their income immediately. In essence. Efforts aimed at improving consumers’ standard of living are not typically thought of as a marketing activity. but not necessarily provide the means to purchase them. In 2002. In other situations. Expanding distribution by itself will help make products available to rural consumers. modification of products.in)[1]. A combination of single-use sachets and reverse engineering of product formulation has allowed P&G to make products affordable and at the same time maintain their margins (Byron. Use of women’s self-help groups to target consumers in outlying rural areas.4 388 for rural areas Crest Salt White was developed and sells for one-half the price of the more exotic versions. for example. often two or more times per day and spend relatively small amounts. targeted rural villages with populations under 2. unless consumers have the disposable income to afford products. Responsibility for sales was too diffused and no one individual made a sufficient amount of money to encourage aggressive promotion . they make instantaneous choices between product categories rather than planning purchases on a weekly basis. elimination of product features and simpler or cheaper packaging which enable products to be sold at lower prices. simplifying a product to its essentials and focusing on functionality is likely to be the most effective strategy. 2007). Hindustan Lever (Unilever’s subsidiary in India. People shop frequently. firms must also find ways to enhance consumers’ ability to purchase products and services. They need not only to secure adequate distribution. often single-use sizes and price points that reflect the amount of discretionary income consumers typically carry. to improve its distribution in rural areas of India.IJOEM 6. Consequently. now Hindustan Unilever) embarked on an ambitious undertaking called Project Shakti. However. In recent years. NGOs and self-help groups in each region have to be located to gain their co-operation with the project and help in identifying the right entrepreneur in each village.com). ITC developed their eChoupal system in order to improve the efficiency of the supply chain. In addition to increasing HUL’s sales. By the end of 2009. 2004. increasing the standard of living for the entrepreneurs and their families.000 Shakti entrepreneurs in 100. In emerging markets. it is critical to view the consumer as part of an ecosystem. This provides an opportunity to apply information technology to establish an integrated platform incorporating both downstream flows of farm produce to markets and backward flows of agricultural inputs and consumer goods to the farmer/consumer. rather than solely as the object of a marketing plan. Given the time and distance of travel to the market. marketing activities played a key role. such as wheat. it is important to recognize that in rural areas farmers may play a dual role both as suppliers of commodities. In some states. one individual in each village was designated as the Shakti entrepreneur. resulting in higher prices paid to the farmers and at the same time increasing their ability to consume. consisting primarily of laundry detergents and personal wash products. the system has also provided substantial benefits to the Shakti entrepreneur. there were over 45.000 villages reaching three million homes (www. Farmers had to travel considerable distance to the nearest market or mardi and did not have price information before they embarked. Traditionally.and sales of HUL’s products. not only in increasing Hindustan Unilever’s sales. Products are designed and shaped to meet consumer needs and then shipped through various intermediaries down the distribution channel to the end consumer. attitude toward the status of women is a major barrier. and as consumers. The line of products sold was only 150 SKUs in order to limit the amount of inventory the women needed to maintain and facilitate financing of the inventory. www. In addition. as well as the support of district administrators to establish the system.itcportal. Coordinating with Hindustan’s Unilever’s sales force to identify areas that were not currently covered was necessary. Consequently. soy beans and rice.com). The sole feedback loop from the consumer to the manufacturer relates to information about consumer needs and satisfaction or dissatisfaction with products and services. The system worked well and the women were able to expand their income by selling products to distribution outlets as well as directly to consumers. This has encountered a number of obstacles. Role of information in helping producer/consumers. This improves the efficiency of the entire value chain. Project Shakti involved not only working with existing self-help groups but also partnering with NGO’s to provide micro-financing. even if the prices were not favorable. Four lines accounted for 50 percent of sales.unilever. but on average her activities nearly doubled her household’s income. firms have tended to view consumers as the end point of the value chain. Rather than sharing responsibility for distribution of products. While this perspective also applies to emerging markets. Government approvals also have to be obtained. they tended to sell their crops there. Not only is her status in the community substantially improved. but as importantly. by eliminating middlemen. helping farmers increase their yields and obtain better prices for their crops (Sivakumar. HUL has employed a consulting firm with experience in developing and implementing rural marketing programs. The previous distribution system was inefficient and put the farmer at a disadvantage. To accelerate progress. Empowering rural consumers 389 . Hindustan Unilever has attempted to expand the scope of the Shakti system. ITC. Prior to the widespread availability of mobile phones. this should only be undertaken after the first two steps have been initiated. ranging from packaged goods. 2010). Something as simple as a mobile phone can help to reduce information asymmetries. it is important to work with existing . Together these efforts resulting in increases in crop quality and yield.IJOEM 6. Currently. By using mobile phones they were able to identify the best ports to take their catch to. Also.e. While it is essential to develop the ability to market effectively in a particular locale. The computer network also provided access to government information on best agricultural practices which was shared among farmers. resulting in an increase in their average income by 8 percent. they had higher incomes and could buy products to improve their operations. This enabled farmers to find information on prices in various markets and select those with the most favorable prices. hypermarkets. 2007). the Choupal Saagars sell consumer products. ITC provided a lead local farmer or sanchalak in each village with access to the internet which he shared with other farmers. ITC was assured of high quality supplies for its food processing and paid lower prices for agricultural inputs since the efficiency of the distribution system was improved and inefficient middlemen eliminated. Thus. By improving the efficiency of the supply-side value chain. chemical products. appliances and cosmetics to apparel. Plans call for this number to increase to 20 million farmers in the near future (Himatsingka. Developing the ability to market to rural consumers The third challenge is often the one that marketers mistakenly attempt to address first. In addition to agricultural products. as well as methods to evaluate and grade the quality of their crops helped to improve yields. ITC increased farmers’ capacity to purchase and enhanced demand as well. While relatively few firms have the same size and scope of operations as ITC to enable them to develop projects on this scale. by purchasing directly from farmers.000 villages. enabled farmers to obtain higher prices for their crops. the more general lesson is that it is critical to devise ways to increase income levels in rural areas so that consumers can afford to purchase finished goods. the eChoupal system reaches four million farmers in over 40. This coupled with modern laboratory analysis of soil and water. Better information also resulted in an average decrease in the price consumers paid for fish as there was less waste and spoilage due to a better match between supply and demand ( Jensen. providing those living in rural India with a world-class shopping experience. India frequently arrived at ports after the buyers had left and hence there was no market for their catch or alternatively there were too many other boats and hence the prices were lower. i. It was able to build an additional layer to the distribution infrastructure on the agricultural supply platform. ITC developed a broadband internet infrastructure to provide farmers with information on market prices. created value both for itself and for the farmer. These would not have been successful without the increase in purchasing power achieved through integrating the supply chain. machinery and other necessities to the farmers. At the same time.4 390 To help remedy this situation. Since they now received better prices for their products. to sell fertilizer. fishermen of the coast of Kerala. The integration of the supply value chain was matched on the demand side by the establishment of hypermarkets called Choupal Saagars at major collection points. A thorough understanding of consumers is needed to guide development of the appropriate infrastructure to effectively market to them. This includes facilities to store products as well as a system of intermediaries to facilitate distribution. The importance of these small mom-and-pop stores is underscored by the fact that in emerging markets 80 percent of the population shops in these types of stores (Byron. local. large domestic businesses. Rather than focusing on the type of partners typically used in developed countries. etc. water. This goes beyond traditional joint ventures with local firms and extends to NGOs. only recently begun to adapt its marketing mix to reach these consumers and still lags behind its main rivals. but facilitate the development through tax incentives. Firms targeting rural consumers are confronted by an absence of the infrastructure necessary to practice effective marketing. that can assist in guiding development of the infrastructure and consumers’ ability to consume. Further. 2007). Often there are critical deficiencies in the physical infrastructure necessary for consumption of certain products. as well as the “soft” infrastructure of advertising agencies. the distribution infrastructure is highly fragmented and if large-scale retailers exist. i. Typically. which generate over 40 percent of their sales from developing markets. compared to only 26 percent for P&G (Byron. such as running water for washing machines and electricity necessary for even small appliances. Working with local partners can be a critical component of success in rural markets. Despite their small size. 2010). marketing research organizations and distribution intermediaries needed to reach consumers. often by hand (Stanford.e.000 high-frequency stores that are regularly visited by 70 percent of the population. government agencies or private enterprise typically undertake projects related to development of the infrastructure. in developing countries. collaboration with a broad range of partners including NGOs and other socially Empowering rural consumers 391 . it is possible to establish partnerships with local NGOs who are interested in overall economic development in an area. provide coolers and make daily deliveries as small as a case every day to small shops. energy. or federal.indigenous entities. P&G has. Developing the infrastructure. These partnerships may involve self-help groups. In Mexico. Related to this is the soft infrastructure of organizations necessary to distribute goods. may not be directly involved. including major shopping centers. such as NGOs. micro-financing. either state. or groups with social and environmental concerns. The highly fragmented and under-developed nature of the distribution system means that Coke has to train shopkeepers. they are only in major urban areas. Consequently. 2007). these stores in aggregate represent P&G’s largest customer. However. Partnering with NGOs. This includes both the “hard” infrastructure relating to transportation. This hard infrastructure is largely beyond the control of marketers and must be developed by government agencies or NGOs. Colgate-Palmolive and Unilever. other multinationals or government entities. One of the major challenges for Coca-Cola as it expands in Africa is developing its distribution system in an environment where much of the product has to be delivered by hand. In developed economies. Often. Food and soda account for 60 percent of sales with personal care and household items accounting for only 10 percent. In the developing world. across Latin America these stores average 250 square feet in size and are typically poorly lit. but NGOs can be equally important. however. there are 620. emphasis needs to be placed on adapting and tailoring mass-merchandising strategies used in developed countries to effectively reach and service highly fragmented distribution systems. these entities are still pivotal. the government agencies. that facilitate consumption and physical distribution of products. Much of this discussion is based on information appearing on Hindustan Unilever’s web site (www.P. Conclusion Marketing can play an important role in fostering economic growth and development. (2010). pp. The mechanism for growth through marketing relates to the mobilization of latent economic energy and fostering the development of entrepreneurs and managers. This process was presciently recognized by Drucker (1958) over 50 years ago. 16 July.hul.4 392 oriented organizations may prove more effective in reaching consumers in rural areas.. substantial creativity in formulating strategy and overcoming obstacles and above all. Long Range Planning. (2004). “Empowering rural people for their own development”.in) and a Harvard Business School case (9-505-056. Fortune. marketers establish the foundation necessary for success.co. “China deluxe”. they understand the complex social hierarchies and personal interactions among women and can situate these in the broad context of the traditions and social structure of a village. Drucker. Wall Street Journal. rural consumers in emerging market economies offer tremendous potential. “Marketing and economic development”. pp. but also play a key role in marketing and distribution of certain types of products of services. Palgrave Macmillan. 252-9. Gold Coast. but realizing this requires significant investment. January. 35. Such organizations typically have a deeper understanding and better insight into social organizations and underlying motivations of villagers in rural areas. Economic Times. particularly those relating to health and hygiene by educating consumers about the benefits of their use. Australia. In essence. Elmhirst Lecture. but also the one with the greatest multiplier effect on economic development. 148-56. A. H. They can identify which women are likely to be best suited to be leaders or to run a local retail business as well as the type of support she will need to effectively fulfill that role. P. Vol. Doctoroff. Rev. pp. New York. References Binswanger. NGOs and other social organizations not only provide information and insights into understanding consumer needs and social structure in the village. 457-74. A. (2002). C. N.IJOEM 6. A1-ff. Chandler. 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